President Donald Trump announced a bipartisan deal to suspend the U.S. debt ceiling and boost spending levels for two years, capping weeks of frenzied negotiations that avert the risk of a damaging payments default.
Congressional leaders pledged to support the bipartisan compromise that left all sides unsatisfied but focusing on the provisions they could count as a win.
“I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy – on a two-year Budget and Debt Ceiling, with no poison pills,” Trump said on Twitter. “This was a real compromise in order to give another big victory to our Great Military and Vets!”
The House has to approve the budget bill this week before members leave July 26 for a six-week recess. The Senate can put it to a vote as late as next week. The White House, in a statement on Monday night, said “both House and the Senate should quickly move this deal to the president’s desk for signature.”
Earlier, Pelosi and Schumer said in a joint statement that “Today, a bipartisan agreement has been reached that will enhance our national security and invest in middle class priorities that advance the health, financial security and well-being of the American people.” McConnell said in a statement he backs the deal and plans to hold a vote before the August recess.
The broad agreement, finalized after weeks of negotiations between Pelosi and Treasury Secretary Steven Mnuchin, would suspend the debt ceiling until July 31, 2021, eliminating the risk that the government could miss payments as early as September. It would also cancel automatic cuts that would have reduced domestic spending by $55 billion and military spending by $71 billion compared with 2019 levels.
Under the terms of the agreement, the budget cap for discretionary spending will rise to $1.37 trillion in 2020 and $1.375 trillion in 2021 — which doesn’t include the cost of programs like Medicare, Medicaid and Social Security that are automatically funded, according to a person familiar with the deal. That’s an increase from $1.321 trillion this year.
Republicans were pushing for more defense spending and managed to secure $738 billion in 2020 and $741 billion in 2021, including funds for overseas operations that aren’t subject to budget caps. Democrats secured $632 billion in 2020 and $635 billion in 2021 for domestic spending.
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